spasmous wrote:

- quote -

I would definitely avoid taxable bond funds outside of retirement
accounts. Other possibilities (in addition to what has been
suggested by others):
- High interest rate money market/savings. Hard to beat
the risk/return they offer nowadays. So you could park
it there for a bit.
- Tax free money market fund. Depending on your tax bracket
and the fund you choose, the tax-equivalent yield would
be similar to the above.
- T-bills. 5+% nowadays and exempt from state taxes.
- I-bonds (you could use this as your cash position and move
more of your 401k stuff into stocks). The interest rate
for this 6 mo. is terrible at ~2%. I'm hoping it will recover when
they change the next time. Main advantage here is tax-deferral
while still being fairly liquid.

I realize none of the above are aggressive investing for the
long term, but given that you've maxed out your 401(k) and Roth
and are investing those pretty aggressively, I think the market
is uncertain enough that it's worth keeping cash.

Anoop

spasmous wrote:
- quote -

Any capital invesment you dont plan to sell for years- real estate,
collectables,
certain stocks, etc. Some types of capital do allow deferred gain
swapping
called 1031 exchanges.

There are "tax advantaged" mutual funds which minimize internal
selling.
An index fund might only sell one percent a year, mainly responding to
slight
changes in the index.

An insurance product such an a variable annunity. In the past they had
bad reputations with 4% annual overheads and 10% sales penalties.
There are new ones with overheads as low a 0.35%,
including both the insurance and fund managment parts and no sales
penalty
becing sold by Fidelity, Vanguard, etc. Theres a tax law that says
internal
gains in an insurance product is deferred. Watch out, there are still
lots of
bad ones out there. Salesmen get huge commisions on the bad ones, so
they may deceive you.

Actually some advisers such as Susie Orman warn against too much
deferred
tax investing. You may be in a higher tax bracket when you take money
out.
With tax law in this area changing every decade or more, it may be
advisable
to hedge your bet and do some of both.

"jIM" <noreplysoccer[at]hotmail.com> writes:

- quote -

Speaking of portable insurance policies - do you have long-term
disability insurance? Many employers now offer policies which
remain owned by the employee and which may be taken with you
when you leave (you have to start making the payments out of
pocket at that time, though).

- quote -

Might want to up that a touch. Maybe to 3 or 4 months.

- quote -

That doesn't mean you weren't any good at it. Everyone in
stocks makes some mistakes, and almost everyone has down
years/periods.

Nevertheless, it's a lot of work and if you're just not
interested, there's very little reason to do it. Find a
couple of well managed funds and be done with it. Since
they are going to be taxable accounts, look for tax-efficient
funds - indices, tax-managed, or otherwise.



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Plain Bread alone for e-mail, thanks. The rest gets trashed.
No HTML in E-Mail! -- http://www.expita.com/nomime.html
Are you posting responses that are easy for others to follow?
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- quote -

This makes sense. One alternative to savings to consider is stashing
cash so when you relocate, you can buy (with ~20% down).
- quote -

good diverification, IMO
- quote -

you can keep if you change employers.

- quote -

concentrate on companies which pay dividends, or concentrate on certain
industries you know. For example I work in software industry and do
well buying stocks of both competitors and partners.

"joetaxpayer" <joetaxpayer[at]nospam.com> wrote
- quote -

My mistake.

jIM wrote:
- quote -


Thanks for your detailed replies everyone. Just to respond to a few
questions, I expect to travel/relocate as part of my job so don't want
to buy a house somewhere. I rent.

- quote -

international large cap, 10% REIT and 30% money market. I'm waiting for
a big drop in any of the above then I'll invest the cash in that.

- quote -


- quote -


- quote -


- quote -

I tried that about 2 years ago with $17k and am the proud owner of a
portfolio now worth $14k. I guess it's not my thing - I'm just not very
interested in companies.


Elle wrote:
- quote -

Maxed out both $15k.


======================================= MODERATOR'S COMMENT:
Please trim the post to which you are responding. "Trim" means that except for a few lines to add context, the previous post is deleted.

Elle wrote:

- quote -

Because he maxed out his Roth as well.

Elle wrote:
- quote -

The OP said he already maxed out his Roth IRA contribution for the
year. So that precludes any further IRA contribution, even a
non-deductible, traditional one.

- quote -

I heard about this on the news a while back. I'm fairly excited about
the prospect of being able to convert my traditional IRA to a Roth. I
feel that the $100K income limit is RIDICULOUSLY unfair to married
couples. However, I'm not holding my breath. There's 3.5 years of
Congressional screw-up between now and 2010. I'll be surprised if the
law actually makes it to its maturity date (plesantly surprised, but
surprised, nonetheless).

--Bill

"Elle" <honda.lioness[at]nospam.earthlink.net> writes:

- quote -

At that point, he should be considering a decent tax-efficient
fund in a regular taxable account (possibly an index fund, but
not necessarily - there are some excellent non-index funds,
particularly ones where the manager has a lot of his own
taxable money in the account - which perform very tax efficiently,
too).

He might also consider some of the ultra-low-cost VAs we've
talked about before (no-frills, no riders - ie. Vanguard's
and Fidelity's).


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Plain Bread alone for e-mail, thanks. The rest gets trashed.
No HTML in E-Mail! -- http://www.expita.com/nomime.html
Are you posting responses that are easy for others to follow?
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"joetaxpayer" <joetaxpayer[at]nospam.com> wrote
- quote -

Why not the non-deductible contributions to his/her
Traditional IRA?

I checked on the law you cited in another thread and see
that the law currently will allow people to convert the
contents of a Traditional IRA to a Roth IRA without
limitations on income starting in 2010.

To the OP: Can you clarify whether you maxed out both the
matching and non-matching contributions to your 401(k)? The
above assumes you maxed out both.

spasmous wrote:
- quote -

What type of investments do you have in your 401k?
What type of investments do you have in your Roth?

Do you need life insurance?
Do you have an emergency cash fund?

I would suggest setting some cash aside in some form of savings or
money market account- about 2 months worth of expenses. Some people
may suggest up to 6 months worth.

I would then suggest making sure you have diversified investments in:

1) Large Cap US Stocks (like S&P 500). Value tilt for some here is
preferred
2) Large Cap International Stocks
3) Small Cap US Stocks (some prefer a value tilt here)
4) Small Cap International/ Emerging markets stocks

Then possibly add in a sector fund (like technology or healthcare).
Some of these funds might give you more capital gains and dividends
each year for income tax purposes. Another alternative is a pure
growth, pure value, mid cap or some other special type of fund. I
happen to like mid cap funds and own a couple types of Mid Cap funds.

An alternative is to buy individual stocks through a brokerage. You
then control when capital gains occur.

An S&P 500 index fund is a fine idea. Better still is a total stock
market index fund, such as Vanguard's VTSMX, which captures not only
large caps, but all caps and all styles.

"spasmous" <spasmous[at]gmail.com> wrote in message
- quote -

Recommend Vanguard Tax Managed Capital Appreciation (10K minimum) or similar
fund which tracks the Russell 1000. Also, as Bill pointed out you should
consider real estate if you do not already own your personal residence.

Good luck
BeachBum

woessner[at]gmail.com wrote:
- quote -

Bill, the OP didn't state a desire (or not) for owning. At this part of
the real estate cycle, it depends where he lives as to whether or not
that's the right next move.

I agree 100% with your S&P index suggestion. That was what I was about
to reply.

JOE

spasmous wrote:
- quote -

Personally, I'm a big fan of real estate. And I'm not just talking
investment properties, but also your own house. You said you don't
have a mortgage, but not whether that's because you're renting or
because you own your home outright. If you don't own a house, I would
highly recommend it as your next move. In fact, I would put purchasing
a house as a higher priority than your IRA or 401k (except, perhaps,
for an employer match).

After that, my personal investment style is fire-and-forget. I put all
my investment money in an S&P 500 index fund. It's not optimal, but
it's effective and low maintenance.

--Bill

I have maxed out my 401k and Roth IRA contributions this year and it's
still only August. I'm 32 and have no debts, kids or mortgage. I do not
plan to have any of those things in the next 5 to 10 years. I would
like to put more in my 401k but obviously that's not possible. What do
people recommend for non-tax sheltered investments?

I like the low maintenance of 401k (no tax forms) and can tolerate
quite a high risk.